Hindustan Unilever (HUL) is in advanced talks to acquire direct-to-consumer (D2C) skincare brand Minimalist at a valuation of Rs 3,000 crore, according to a source in the know.
The brand that came into being in 2020 is known for its ingredient-based skincare products. It had raised funds in its series A from Unilever Ventures, and Sequoia Capital India (now known as Peak XV Partners).
“In line with our business strategy, on an ongoing basis, we evaluate various strategic opportunities for growth and expansion of our business. We will make appropriate disclosures whenever there is any material development that requires disclosure under applicable laws,” an HUL spokesperson said in an email response on the deal.
According to the source, HUL is expected to ink the deal within the ongoing quarter (Q4FY25) and the intent of the company is to get a majority control of the company. The founders of Minimalist — Rajasthan-based brothers Mohit Yadav and Rahul Yadav — may hold some stake, the source added.
The deal is expected to be at 8-10 times of the brand’s revenue, which stood at Rs 347.4 crore in FY24, compared to Rs 183.8 crore in FY23. Its profit after tax (PAT) also more than doubled to Rs 10.8 crore in FY24 from Rs 5.2 crore in FY23.
The source added that there is a possibility that the deal could be valued higher than the expected valuation.
In December 2022, HUL announced its entry into the health & wellbeing space by making public that it had signed agreements to acquire stakes in two companies — Zywie Ventures, which sells plant-based and clean-label consumer wellness products under the brand name OZiva, and Nutritionalab, which houses its products under the brand name Wellbeing Nutrition.
After its July-September (Q2FY25) earnings, Rohit Jawa, managing director and chief executive officer at HUL, told investors on a conference call: “One of the six big bets in beauty and haircare segment is the light moisturizer category. Today, consumers are looking for more than just basic moisturisation. They want products that offer superior benefits through pleasant, non-sticky sensitive experiences and we expect this category to continue picking up pace in times to come.”
Jawa also told investors that as a result of HUL’s dedicated efforts in e-commerce and beauty.com channels, the maker of Pond’s products continues to gain healthy market shares. “Our focus initiative in organised trade has led us to continue with a double-digit growth trajectory in the September quarter. We remain committed in our efforts as we continue to transform our portfolio speed to shape the evolving aspirations of the country,” he added.
The beauty and wellbeing category contributes to 21 per cent of HUL’s revenue.
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